(Consider This) Monetarists claim that the financial crisis and resulting 2007-2009 recession were caused largely by
A)monetary policy that was too loose for too long.
B)monetary policy that was too tight for too long.
C)unexpected changes in the velocity of money.
D)declines in business and consumer confidence.

Question

Quizplus · Accepted Answer

Monetarists believe that the financial crisis and resulting recession were caused by monetary policy that was too loose for too long. This led to an increase in the money supply, which in turn led to inflation and asset bubbles. When the bubbles burst, it caused a sharp decline in economic activity.

(Consider This) Monetarists Claim That the Financial Crisis and Resulting